Correlation Between Zoom Video and Aware

Can any of the company-specific risk be diversified away by investing in both Zoom Video and Aware at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Zoom Video and Aware into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zoom Video Communications and Aware Inc, you can compare the effects of market volatilities on Zoom Video and Aware and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Zoom Video with a short position of Aware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and Aware.

Diversification Opportunities for Zoom Video and Aware

-0.76

Correlation Coefficient

Zoom Video  Aware

Pay attention - limited upside

The 3 months correlation between Zoom and Aware is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and Aware Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aware Inc and Zoom Video is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Zoom Video Communications are associated (or correlated) with Aware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aware Inc has no effect on the direction of Zoom Video i.e., Zoom Video and Aware go up and down completely randomly.

Pair Corralation between Zoom Video and Aware

Allowing for the 90-day total investment horizon Zoom Video Communications is expected to under-perform the Aware. But the stock apears to be less risky and, when comparing its historical volatility, Zoom Video Communications is 2.7 times less risky than Aware. The stock trades about -0.12 of its potential returns per unit of risk. The Aware Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  155.00  in Aware Inc on May 4, 2025 and sell it today you would earn a total of  62.00  from holding Aware Inc or generate 40.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Zoom Video Communications  vs.  Aware Inc

Zoom Video Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zoom Video Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Aware Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aware Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Aware exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zoom Video and Aware

The main advantage of trading using opposite Zoom Video and Aware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, Aware can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Aware will offset losses from the drop in Aware's long position.

The idea behind Zoom Video Communications and Aware Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.